Nvidia, the chipmaker saw its biggest plunge in market capitalization losing record $593B on Monday. Nvidia’s market cap drop was due to stock sell off sparked by concern over DeepSeek making it Nvidia’s biggest single day drop in U.S. history. DeepSeek’s AI’s disruption has hit the chipmaker Nvidia the hardest, but the sentiments were seen across the board with the S&P 500 dropping and the Nasdaq fell over 3%.
There is fear of AI tech available on open source at a fraction of the cost, was what largely dragged the markets.
Nvidia stock plunges
Nvidia’s share price saw a fall of about 17% to close at $118.58 making it the worst day on the market for Nvidia since pandemic. After Nvidia surpassed Apple last week to become the most valuable publicly traded company, the stock’s drop Monday led a 3.1% slide in the tech-heavy Nasdaq.
What prompted the Nvidia sell off?
The Nvidia stock selloff was majorly due to concerns that Chinese artificial intelligence lab DeepSeek is presenting increased competition in the global AI supremacy. DeepSeek unveiled a free, open-source large language model (LLM). According to DeepSeek it took only couple of month and less than $6M to build, using reduced-capability chips from Nvidia called H800s.
Nvidia’s GPUs were the leaders in the market for AI chips in the U.S., with companies like Alphabet, Meta and Amazon spending billions of dollars on the processors to train and run their AI models.
As per analysts at Cantor, the release of DeepSeek’s latest technology has caused “great angst as to the impact for compute demand, and therefore, fears of peak spending on GPUs.”
But after Nvidia’s huge run-up with its stock soaring 239% in 2023 and 171% in 2024, the investors are on edge about any possible pullback in spending.
Tech market shockwave
Broadcom, too fell 17% on Monday, pulling its market cap down by $200 billion. All data center companies dependant on Nvidia’s GPUs saw big sell-offs as well. Dell, Hewlett Packard Enterprise and Super Micro Computer dropped at least 5.8%. Oracle, a part of President Donald Trump’s latest AI initiative, fell 14%.
Nvidia market cap tumbles
Nvidia saw a loss that was more than double the $279 billion drop the company faced in September 2024, which was the biggest one-day market value loss in history at the time, surpassing Meta’s $232 billion loss in 2022. Nvidia’s market cap decline is more than double the market cap of Coca-Cola and Chevron and exceeds the market value of both Oracle and Netflix.
Hit on Nvidia’s CEO networth
The networth of Nvidia’s CEO Jensen Huang also took a massive hit, declining roughly $21B, as per report. Pushing Huang to 17th on the richest-person list.
DeepSeek most downloaded app
The excitement around DeepSeek over the weekend has made its app the most downloaed free app in U.S. on Apple, ahead of OpenAI’s ChatGPT. DeepSeek’s development comes despite various curbs on U.S. chip exports to China.
Currently Nvidia is the third most-valuable public company, behind Apple and Microsoft
